Get Social

OPINION: No flood insurance? Here’s what you can expect

Courier, The (Houma, LA)

July 08--I ran across some data the other day that indicate thousands of locals are flirting with disaster.

First came a report last month that shows four of every five homes in Terrebonne and Lafourche parishes are at risk of being damaged by hurricane storm surges. All of the homes are at high, very high or extreme risk. None are listed at moderate to low risk.

CoreLogic, a global property research company, found 71,673 homes in the Houma-Thibodaux area, comprised of the two parishes, are at risk of flooding from hurricane storm surges. Combined, the homes would cost an estimated $14.5 billion to rebuild.

Match the numbers with other data and the picture grows bleaker.

Terrebonne has 45,557 housing units, Lafourche 41,302, according to July 1 figures from the U.S. Census Bureau. Of those 86,859 homes, the CoreLogic report says 82.5 percent are at risk of damage or destruction from a hurricane storm surge.

Local homes at risk are also more than double the number covered by flood insurance. As of March 31, FEMA statistics show, the National Flood Insurance Program covered nearly 29,000 homes in the two parishes with a combined value of roughly $8 billion.

So what does all this mean?

Based on the data, if a major storm surge hit Terrebonne and Lafourche, tens of thousands of residents without flood insurance could face having to come up with money to rebuild homes that CoreLogic's report indicates are at high risk.

No problem, you say? You'll just wait for a bailout from some federal program that will sprinkle money around after the disaster.

That's highly unlikely, the financial website ValuePenguin reports.

"Data shows a significant portion of homeowners may be banking on federal flood relief they'll never receive," its June 29 article says

Insurance Information Institute figures show only 19 percent of properties in Florida were covered by the National Flood Insurance Program last year, the story notes. Other coastal states are worse: 2 percent were covered in Georgia, 3 percent in North Carolina and 9 percent in South Carolina.

If you're among these homeowners who lack flood insurance, here's what you can expect.

"The maximum direct assistance FEMA will pay is $33,000, which sounds like a lot of money, but not if you have a significant flooding event," Michael Barry of the Insurance Information Institute told ValuePenguin. "And while the maximum claim amount is $33,000, the average payout is closer to $10,000."

Compare that to the average flood insurance claim in 2016 -- $62,247.

"What ends up happening for most of those uninsured losses is that people get loans at a below-market interest rate," Louisiana Insurance Commissioner Jim Donelon told The Courier and Daily Comet in a story about the same issue last year. "That, in effect, sucks all the equity out of their homes. For a typical family, their biggest investment or asset is their home."

The same story revealed about 34 percent of homes in Terrebonne and 29 percent in Lafourche are insured against floods, figures that showed some of the steepest declines among Louisiana parishes over the past five years.

This, despite living in a place where hurricanes pose a major threat six months of every year, where even heavy rain can flood streets and homes and where officials have long advised every resident to have flood insurance.

The average policy cost $642 last year in Terrebonne, $678 in Lafourche, according to FEMA data. The median home's value, meanwhile, is just under $140,000 in both parishes.

Sure, some people can't afford to buy flood insurance. But far more people can't afford not to.

-- Executive Editor Keith Magill can be reached at 857-2201 or [email protected]. Follow him on Twitter @CourierEditor.